The import reduction programme for Hydrochlorofluorocarbons (HCFCs) is reducing the supply and increasing substantially the cost of major refrigerants such as R22 and R123. These refrigerants, and many others not so commonly found in commercial buildings, are listed for phase out in accordance with Australia’s obligations under the Montreal Protocol.
Yearly Import Reduction of R22 timetable
2010 / 2011 = 1,260 metric tonnes
2012 / 2013 = 720 metric tonnes
2014 / 2015 = 180 metric tonnes
2016 to 2029 = 45 metric tonnes
R22 tripling in cost by 2018
The current cost of replacement gas for R22 is circa $250/kg (up from circa $150/kg in 2013) and is expected to rise to over $700/kg by 2018. In a typical older building with chillers or packaged units operating on R22 there is commonly around 500Kgs of refrigerant held at the property. At current prices this would cost $125,000 to replace, rising to an estimated $350,000 in 2018.
For R123 the current cost for replacement gas is $480/kg. Large plant items can have large quantities of refrigerant – a recent assessment carried out by SGA identified 820Kgs of R123 in a set of chillers. The total current replacement cost of this gas (excluding labour and GST) would be $393,600.
Across a portfolio of assets the potential exposure to refrigerant replacement costs is significant.
The SGA Property Consultancy Solution
There are a range of options available to property owners but these require careful consideration, for example many replacement strategies for HCFC’s require expensive retrofitting of equipment to cope with different gases and operating pressures. SGA can assist in developing a strategy to mitigate the risk posed by the impending refrigerant gas price rises and help you create opportunities where others may only see costs.
To understand the real costs of your refrigerant equipment and the possible to address increasing costs and compliance please contact any of the SGA Property Consultancy offices.